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- Primo Water Corporation Announces Full Year and Fourth Quarter 2022 Results; increases the quarterly dividend again

17% revenue growth at Water Direct

TAMPA, Fla., Feb. 24, 2023 /PRNewswire/ -- Primo Water Corporation (NYSE: PRMW) (TSX: PRMW) (the "Company" or "Primo"), a leading provider of sustainable drinking water solutions in North America and Europe, today announced its results for the full year and fourth quarter ended December 31, 2022.

(Unless otherwise noted, all Q4 2022 comparisons are relative to Q4 2021 and all FY 2022 comparisons are relative to FY 2021; all information is in US dollars. Reconciliations do not GAAP are presented in the exhibits to this press release Fourth Quarter and Fiscal 2022 Period Ended December 31, 2022, Fourth Quarter and Fiscal 2021 Ended January 2, 2022).

HIGHLIGHTS FOR FISCAL YEAR 2022

"Fiscal year 2022 was another successful year for our pure water company. We continue to execute on our differentiated Water Your Way platform, delivering strong revenue and adjusted EBITDA growth. Our investment thesis is compelling with a portfolio of industry-leading water solutions multiple channels and geographies, strong customer demand, and a compelling financial profile. Continued investment in our digital platforms, increased direct sales of dispensers driving dispenser connectivity with our water solutions, and ongoing optimization of our route-based operations provide a solid foundation to achieve our long-term growth objectives," said Tom Harrington, Primo's CEO.

"As a result, we are confident in our 2023 revenue outlook of between $2.3bn and $2.35bn, and adjusted EBITDA outlook of between $450m and $470m," Harrington said.

"In recognition of our 2022 results, our strong financial position, and confidence in Primo's future, our Board of Directors has authorized a quarterly dividend of $0.08 per common share, representing a 14% increase over quarterly dividends. and marks the second year in a row the Board has increased the quarterly dividend per share by $0.01," Harrington continued.

PERSPECTIVE

Primo targets the following results from continuing operations for the first quarter and full year 2023:

FOURTH QUARTER AND 2022 RESULTS CONFERENCE CALL

Primo will hold a conference call, simulcast on the web, on Thursday, February 23, 2023 at 10:00 AM. m, eastern time. A question and answer session will follow the management presentation. To participate call the following numbers:

North America: (888) 664-6392 International: (416) 764-8659 Conference ID: 80388633 This is a live phone line, listen-in only.

A live audio webcast and slideshow will be available through the company's investor relations section of the website at www.primowatercorp.com. The webcast will be recorded and archived for playback on the investor relations section of the website for two weeks after the event.

OVERALL FISCAL YEAR PERFORMANCE

OVERALL FOURTH QUARTER PERFORMANCE – CONTINUING OPERATIONS

PERFORMANCE OF THE FOURTH QUARTER REPORTING SEGMENT

North America

Europe

SHARE REPURCHASE PROGRAM During 2022, the Company repurchased approximately 1.8 million shares of common stock for approximately $24 million under its share repurchase program.

QUARTERLY DIVIDEND The company announced that its Board of Directors declared a dividend of $0.08 per common share. The dividend is payable in cash on March 27, 2023 to shareholders of record as of the close of business on March 10, 2023.

ABOUT PRIMO WATER CORPORATION

Primo is a leading provider of pure water solutions in North America and Europe, generating approximately $2.2 billion in annual revenue. Primo operates largely under a recurring revenue model in the large format water category (defined as 3 gallons or larger). This business strategy is commonly known as "razor razor" because the initial sale of a product creates a user base that frequently purchases complementary consumable products. The razor in Primo's revenue model is its industry-leading line of innovative water dispensers, sold through approximately 10,000 retail and online stores at various price points. The dispensers help increase penetration into homes and businesses, driving recurring purchases of Primo's razor blade offering or water solutions. Primo's razor blade offering is comprised of Water Direct, Water Exchange, and Water Refill. Through its Water Direct business, Primo offers sustainable hydration solutions across its 21-country presence directly to customers, whether at home or in business. Through her Water Exchange business, customers visit retail stores and buy a pre-filled bottle of water. Once consumed, the empty bottles are exchanged at the displays in our recycling center, which issue a ticket offering a discount for the purchase of a new bottle. Water Exchange is available at approximately 17,500 retail stores. Through its water refill business, customers refill empty bottles at approximately 23,500 self-service drinking water refill machines. Primo also offers water filtration units across its 21 country footprint.

Primo's water solutions expand consumer access to purified, spring and mineral water to promote a healthier and more sustainable lifestyle, while reducing plastic waste and pollution. Primo is committed to its water stewardship standards and is proud to partner with the International Bottled Water Association (IBWA) in North America, as well as Watercoolers Europe (WE), who ensure strict adherence to standards for safety, quality, sanitation and regulation for the benefit of consumer protection.

Primo is headquartered in Tampa, Florida (United States). For more information, visit www.primowatercorp.com.

Non-GAAP MeasuresTo supplement its reporting of financial measures determined in accordance with US GAAP (Generally Accepted Accounting Principles), Primo uses certain non-GAAP financial measures. Primo excludes the impact of foreign exchange from GAAP income to separate its impact from Primo's results of operations. Primo also uses adjusted net income (loss), adjusted net income (loss) per diluted share, adjusted EBITDA and adjusted EBITDA margin to separate the impact of certain elements of the underlying business. Because Primo uses these adjusted financial results in the management of its business, management believes this supplemental information is useful to investors for their independent evaluation and understanding of Primo's underlying business performance and the performance of its management. In addition, Primo supplements its reporting of net cash provided by (used in) operating activities from continuing operations determined in accordance with GAAP by excluding additions to property, plant and equipment and additions to intangible assets to present free cash flow, and By excluding the items identified in the schedules hereto to present adjusted free cash flow, which management believes provide useful information to investors in evaluating our performance, compare Primo's performance to the performance of the company's peer group and assess the company's ability to service debt and finance strategic opportunities, including investing in the Primo business, making strategic acquisitions, paying dividends and strengthening the balance sheet. With respect to the company's expectations regarding its future performance, reconciliations of the company's first quarter 2023 and full year 2023 adjusted EBITDA are not available, as the company is unable to quantify certain amounts with the degree of precision that would be required in the relevant GAAP measures without unreasonable effort. These items include taxes, interest costs that would occur if the company issued debt, and costs to acquire and/or sell a business if the company executed such transactions, which could materially affect our financial results. These items depend on highly variable factors and any such reconciliation would imply a degree of precision that would be confusing or misleading to investors. Primo expects the variability of these factors to have a significant and potentially unpredictable impact on the Company's future GAAP financial results. The non-GAAP financial measures described above are in addition to, and are not intended to be superior to or substitute for, Primo's financial statements prepared in accordance with GAAP. In addition, the non-GAAP financial measures included in this earnings announcement reflect management's judgment on particular items and may be different from, and therefore may not be comparable to, similarly titled measures reported by other companies.

precautionary statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934 that convey management's expectations as to the future based on plans , estimates and projections at the time Primo makes the statements. Forward-looking statements involve inherent risks and uncertainties, and Primo cautions you that several important factors could cause actual results to differ materially from those contained in such forward-looking statements. Forward-looking statements contained in this press release include, but are not limited to, statements about future financial and operating results and trends (including Primo's outlook on first-quarter and full-year 2023 revenue and Adjusted EBITDA and multi-year growth algorithm de Primo), and related matters. Forward-looking statements are based on assumptions regarding management's current plans and estimates. Management believes these assumptions are reasonable, but there is no assurance that they will prove to be accurate.

Factors that could cause actual results to differ materially from those described in this press release include, but are not limited to: Primo's ability to compete successfully in the markets in which it operates; Primo's ability to manage supply chain disruptions and cost increases related to inflation; fluctuations in raw material prices and Primo's ability to pass on increased costs to its customers or hedge against such increased costs, and the impact of such increased prices on its volumes; Primo's ability to maintain favorable agreements and relationships with its suppliers; Primo's ability to successfully manage its operations; currency fluctuations that adversely affect the exchange between currencies, including the US dollar, the British pound sterling, the euro and the Canadian dollar; the impact on Primo's financial results of uncertainty in the financial markets and other adverse changes in general economic conditions, including inflation and interest rates; any interruption of production at Primo's manufacturing facilities; Primo's ability to maintain access to its water sources; the impact of climate change on Primo's business; Primo's ability to protect its intellectual property; the seasonal nature of Primo's business and the effect of adverse weather conditions; the impact of national, regional and global events, including those of a political, economic, business and competitive nature; the impact of COVID-19, related government actions and Primo's strategy in response to this on our business; Primo's ability to fully realize the benefit potential of the transactions or other strategic opportunities it pursues; Primo's ability to realize cost synergies from its acquisitions due to integration difficulties and other challenges; Primo's exposure to intangible asset risk; Primo's ability to meet its obligations under its debt agreements and the risks of further increases in its indebtedness; Primo's ability to maintain compliance with the terms and conditions of its debt agreements; fluctuations in interest rates, which could increase Primo's borrowing costs; Primo's ability to recruit, retain and integrate new management; Primo's ability to manage higher labor costs; Primo's ability to renew its collective agreements from time to time on satisfactory terms; disruptions to Primo's information systems; Primo's ability to securely maintain its customers' confidential or credit card information, or other private data relating to Primo employees or the company; compliance with product health and safety standards; liability for injury or illness caused by the consumption of contaminated products; liability and damage to Primo's reputation as a result of litigation or legal proceedings; changes in the legal and regulatory environment in which Primo operates; Primo's ability to appropriately address the challenges and risks associated with its international operations and address difficulties in complying with laws and regulations, including the US Foreign Corrupt Practices Act and the UK Bribery Act 2010 ; the impact on Primo's tax liabilities and effective tax rate arising from changes in local tax laws or countries adopting more aggressive interpretations of tax laws; Primo's ability to maintain its quarterly dividend; or changes in credit rating.

The above list of factors is not exhaustive. Readers are cautioned not to place undue reliance on any forward-looking statement, which speaks only as of the date hereof. Readers are urged to carefully review and consider the various disclosures, including, without limitation, the risk factors contained in Primo's Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q, as well as other presentations before securities commissions. Primo makes no commitment to update or revise any of these statements in light of new information or future events, except as expressly required by applicable law.

Website: www.primowatercorp.com

CONTACT: Jon Kathol, Vice President of Investor Relations, Tel:813-544-8515, investorrelations@primowater.com

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